Ashoka Buildcon to raise Rs 500 crore via QIP

Funds will be used for bidding new projects and developing existing ones, thereby helping firm to reduce risk premium

BSE-listed infrastructure company Ashoka Buildcon is all set to raise Rs 500 crore via qualified institutional placement (QIP), as it gears up for aggressive expansion.

"We will raise Rs 500 crore via qualified institutional placement (QIP). The funds will be used for bidding new projects  and developing few existing projects. This will help us to reduce risk premium. We are in a formidable position and want to maintain  rate of growth in future," said Satish Parakh, managing director, Ashoka Buildcon.  

With a total revenue of Rs 1,795 crore for FY14, Ashoka Buildcon is one of the largest players in highway development in India with 28 PPP projects.

Macquarie-SBI has invested Rs 800 crore in Ashoka Concessions Ltd (ACL) in the year 2012. The total equity investment by Macquarie-SBI in ACL comes around Rs 490 crore and balance would be received as per equity requirements of projects under construction. This is the second time that Ashoka Buildcon has raised private equity.

When asked if the company has plans to buy majority stake in Jaora Nayagaon Toll project in Madhya Pradesh, Parakh declined to comment.

It has been reported in media that the company is looking to buy out stake in Jaora Nayagaon Toll Project. Currently, it owns 37.7 per cent stake in the toll project, and is planning to buy 36 per cent from existing investors like Srei Infra & IFCI for Rs 900 crore.

Jaora-Nayagaon Toll Road Company (JNRL), is the special purpose vehicle (SPV) incorporated for the project viz. design, construction, finance, strengthening, widening, operation and maintenance on BOT basis for the four laning of Jaora-Nayagaon section of state highway no. 31 in Madhya Pradesh. The project is on design, build, finance, operate and transfer  DBFOT (toll) basis with a concession period of 25 years including the construction period. Presently, JNRL is collecting toll on the this project.

The Jaora Nayagaon Toll Project is owned by consortium of four developers, wherein Srei Infra holds 19 per cent, while PNC Infra & SPML hold 8.5 per cent stake each. The fourth company IFCI sold 26 per cent stake in the project to SBI Macquarie Infra.

The company is developing roads in states like Madhya Pradesh, Karnataka, Tamil Nadu, Andhra Pradesh, Rajasthan, and Telangana with the order book of Rs 3,042 crore, 63 per cent in roads and 37 per cent in power transmission and distribution business.